China Imposes Tariffs on EU Pork in Response to Electric Vehicle Dispute

In a significant development for international trade, the Chinese Ministry of Commerce announced today the implementation of tariffs of up to 198% on pork imports from the European Union (EU). This decision comes as a retaliatory measure against the EU's recent taxation of Chinese electric vehicles. With these tariffs set to take effect for five years starting tomorrow, they markedly represent a reduction from the temporary tariffs of up to 624% that were previously announced against EU pork in September 2024. The new tariff framework will see rates varying from 49% for the Spanish company Litera Meat, identified in the investigation, to the maximum 198% imposed on companies that were uncooperative during the investigation, including the Dutch company Vion. Notably, firms that cooperated with the inquiries, such as well-known Spanish brands like El Pozo, Sánchez Romero Carvajal, Argal, Campofrío, Noel, and Friselva, will face a tariff rate of 98%. This investigation has been pivotal for the Spanish pork sector, which is among the largest suppliers to China. Last year, Spain shipped nearly 20% of its pork exports to the Asian market, making it the second most significant item in the country's agrifood exports structure, following olive oil. Reports indicate that in 2024, Spanish pork exports to China amounted to approximately 540,000 tons, valued at about 1.1 billion euros – a figure representing about 12.5% of the sector's overall foreign sales. However, distinctions are crucial; the recent investigation notably excludes Iberian ham, a hallmark of Spanish gastronomy, and sausages with minimal sales presence in China. Instead, China's demand primarily focuses on offal and less desirable cuts like ears, snouts, and trotters. This retaliatory tariff - described as an action against perceived unfair competition from EU pork products - emerges from a long-standing dispute sparked by Brussels’ measures regarding Chinese electric vehicles. The investigation has extended since its inception in mid-2023, with the complexities leading to China's decision to prolong its scope, initially targeting brands and dairy products as well. While Spain was initially reported to be in favor of the tariffs, the country eventually abstained from the vote to apply these new rates in October 2024, marking a notable shift in position. Concurrently, China and the EU have experienced a nuanced rapprochement, especially after tensions heightening under US President Donald Trump's administration. Analysts had previously pointed out that the US could benefit from these tariff developments alongside other major pork exporting countries like Brazil, Canada, and Argentina. Historically, EU-China relations have oscillated between strategic cooperation and contention. Following a severe African swine fever epidemic in China, which drastically reduced the country’s pork production, the EU capitalized on the opportunity to supply pork to the Asian market. However, as China's national herd began to recover, the proportion of EU pork exports to the region has considerably declined from 55% in 2020 to just 30% in 2023. As Brussels cautiously seeks a balance with Beijing to mitigate the impact of tariffs while navigating its relationship with Washington, it remains to be seen how these trade negotiations will evolve in the coming months. The delicate interplay between these economic powerhouses will require diplomatic finesse as they strive for a stable trade environment amidst geopolitical tensions. Related Sources: • Source 1 • Source 2